In Patterson v. Superior Court , a California Fair Employment and Housing Act (FEHA) case, the Court of Appeal granted the petition for writ of mandate and directed the trial court to vacate its order awarding attorney fees to defendant Charter. The court held that a fee-shifting clause awarding fees in connection with a motion to compel arbitration risks chilling an employee's access to court in a FEHA case, and that the legislature amended the law to make clear that defendants are not entitled to fees unless the defendant establishes plaintiff's opposition to a motion to compel arbitration was groundless. The Court reversed and remanded, instructing the trial court to consider whether the opposition was groundless, because no such finding was made by the trial court.

In Contreras v. Superior Court the Court was called upon to decide whether the determination of Plaintiff’s standing to pursue Public Attorney General Act (often called “PAGA”) claims was for an arbitrator or the court. PAGA claims, brought by an aggrieved employee, are not subject to arbitration per California law. So the Court was ultimately deciding whether the arbitrator had the authority to determine his own authority to decide the matter. The defendant was a transportation service with an app that required the drivers to agree to terms of service when logging in for the first time. The agreement included an arbitration provision with a class action waiver. The plaintiffs, who were former drivers through the app, filed a PAGA suit against the defendant, alleging misclassification as independent contractors. The trial court granted the defendant’s motion to compel arbitration.

In 2019 California’s legislature passed and the governor signed AB 51, which makes it unlawful for employers to condition employment or a benefit of employment on the employee waiving their right to trial and being required to arbitrate their disputes. The employer in this case argued that the Federal Arbitration Act preempts AB 51, an argument that was successful in previously casting aside California law preventing class action waivers. This time the argument fell flat, and the Ninth Circuit upheld most of the law, holding that mandatory arbitration agreements are enforceable in an employment context. The Court reasoned that since agreements generally, arbitration or otherwise, are only enforceable if both parties have a choice to enter into the agreement, a law codifying this notion with respect to arbitration agreements did not run afoul of the Federal Arbitration Act that prohibits laws that discriminate against agreements to arbitrate.

The Ninth Circuit ruled that despite language in an insurance policy requiring that the insurer cover defense fees for false advertising or unfair competition claims, a retailer was required pay for its own defense in a state consumer protection lawsuit brought against it by the California Attorney General. The retailer was therefore forced to pay to its insurer approximately two million Dollars to compensate the insurer for the amounts it already had expended to defend the retailer.

In this case a hotel sued its insurer to recover for COVID related losses. As the Court itself related in the decision, the case “[P]resent[ed] an issue of first impression for a California appellate court: does a commercial property insurance policy provide coverage for a business’s lost income due to the COVID-19 pandemic?” The Appellate Court affirmed the trial court’s decision that there was no coverage, as the spread of the disease did not cause direct physical damage to the business’ property that resulted in losses.

A growing threat to business owners of all size is cybercrime brought on by the mounting strain put on the cyber security industry. Cybercrime takes many forms but has one main goal, theft of secure and private information.

The Daily Journal looked to founding shareholder Bert Rasmussen, and his depth of experience with mergers and acquisitions, for commentary in their coverage of Activision-Blizzard's acquisition by Microsoft Corp. The $68.7 billion all cash deal has come under scrutiny given Activision-Blizzard is currently under a federal consent decree and facing a state lawsuit over allegations of a discriminatory workplace.

In the past decade, several large-scale data breaches have resulted in troves of personal information (PI) and other data falling into the hands of malicious actors. For instance, in 2013, the records of over a billion users were compromised from the email system of Yahoo, including names, birth dates, phone numbers, passwords, backup email addresses, and security question answers. More recently, a massive breach of Facebook's databases compromised the PI of over 533 million users from 106 countries, including over 32 million records on users in the United States. These data included phone numbers, Facebook IDs, full names, locations, birthdates, bios, and, in some cases, email addresses.

2021 was a relatively quiet year for legislation for the automotive industry, as CNCDA’s sponsored bill, SB 361, that would have provided certainty for dealers that want to engage in electronic contracting, failed to pass. The legislature passed a number of bills that continue to move the state towards a zero-carbon transportation sector, as well as some small changes to off-road vehicle and trailer laws. There are important regulatory changes affecting the automotive industry going into 2022, though, and this section gives an overview of what is coming ahead of the curve.

The 2021 legislative session touched on a wide array of business topics. Changes in the law include regulating debt collection, automatically renewing service contracts, and privacy. These laws do not affect all businesses, but are nonetheless worth every business owner’s attention, as they may shape you conduct business in California in the future.

In California, another year means another set of new employment laws that impose burdens on employers. The 2021 legislative session was no exception, with new laws passed and signed that address employment-related confidentiality agreements, wage theft, and family medical leave, to name a few areas. The good news for California employers is that none of the new laws make revolutionary changes to employee rights or employer responsibilities, but employers nonetheless need to understand these changes and adjust their policies to avoid potential liability in the future.

Scali Rasmussen announced today that it has been selected by the Los Angeles Business Journal as a finalist in its "International Business Award." The publisher says the first annual forum and awards celebrates "the global business community and those outstanding corporate stewards who are leading the way in international trade, investment, technology, and innovation."

Scali Rasmussen announced today that its Founder and Managing Shareholder, Christian Scali and Shareholder Jeffrey W. Erdman have been selected as nominees by the Los Angeles Business Journal for its 2021 'Leaders in Law Awards.' The journal's Publisher and CEO, Josh Schimmels, says the awards "recognize the achievements of leading attorneys and firms who make a significant impact on the Los Angeles business community."

In previous articles, we have talked about the importance of using strong passwords and multi-factor authentication to protect consumer data. These are important steps, but only work when a potential user must login to a physical device or program before accessing consumer data. For this reason, every company should take steps to secure all devices and programs so that the user must login after a period of inactivity. This relatively simple step can help prevent a range of types of unauthorized access.

California courts and the California Legislature have long been skeptical about mandatory arbitration agreements in employment contracts. In a recent example, the legislature in 2019 enacted AB 51, which makes it unlawful for employers to condition employment or a benefit of employment on the employee waiving their right to trial and arbitrating their disputes with their employer, among other things. In a case arguing the Federal Arbitration Act preempts AB 51, the Ninth Circuit upheld most of the law, finding that mandatory arbitration agreements are enforceable, but only if both parties have a choice when entering into such an agreement. Questions remained, though, as to what conditions reflect choice on the part of the employee.

The California legislature passed AB 908, the Debt Collection Licensing Act, in 2020. The law requires that all debt collectors, as defined, obtain a license from the Department of Financial Protection and Innovation (DFPI) in order to engage in debt collection practices in California. DFPI began accepting applications on September 1 of 2021, and requires that all debt collectors submit an application by December 31, 2021, in order to engage in debt collection starting January 1, 2022. Debt collectors that submit an application after December 31 must wait until DFPI issues the license to engage in debt collection in 2022 and beyond. Now is therefore the time for California businesses to make a final assessment whether they should apply for a license.

Businesses across the country that have 100 or more employees will need to require COVID-19 vaccinations for all employees or regularly test unvaccinated employees for the disease by January 4, 2022. On September 9, 2021, President Biden announced that he was directing the Department of Labor’s Occupational Safety and Health Administration to adopt Emergency Temporary Standards (ETS) on vaccination and testing, but did not announce a compliance deadline at that time. Now, business can get through the holidays without implementing the mandate, but will need to have it in place at the start of the New Year.

The Federal Trade Commission announced on October 27, 2021 the final updates to the Safeguards Rule under the Gramm–Leach–Bliley Act (“GLB”). These updates are the result of a multi-year process and purport to strengthen security for consumer financial information following an uptick in data breaches. Overall, the updates are more prescriptive than the previous Rule, imposing specific new requirements. For auto dealers who must comply with the new rules when they are fully effective, it means that action is needed now to protect their companies from costly private lawsuits and enforcement actions for failure to comply with the updates.

While it is important for every company to limit access to its data and network with strong passwords, for some sensitive data, traditional passwords aren’t secure enough anymore. Hackers have developed countless tried and tested methods of stealing credentials and gaining unauthorized access to private accounts. But strong passwords are not the only readily available security option. In a report published by Microsoft this year, it revealed that 99.9% of the account compromise incidents they deal with could have been blocked by a multi-factor authentication (MFA) solution. For this reason, your business should adopt MFA solutions to protect its most sensitive data.

On September 9, President Biden announced that the Department of Labor would develop an emergency rule to require employers with 100 or more employees – amounting to over 80 million employees – to mandate vaccination of their workforce against COVID-19 or have employees regularly test for COVID-19. The Biden administration has not yet released the new rule for private employers, but many businesses are starting to prepare.